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From: Columbia Tribune

City Fears Big Losses in Tax Cut

April 3, 2007
By Matthew LeBlanc

A proposed amendment to the Missouri Constitution to limit how much cities can tax telephone companies would cost Columbia nearly $1 million annually, officials said.

House Joint Resolution 21 would send to voters a measure that prohibits cities from taxing phone companies more than they charge for business licenses.

In Columbia, that means companies such as CenturyTel would no longer be taxed 7 percent of its gross receipts. Instead, the charges would be capped at $750, the highest amount businesses now pay to operate in the city.

Under the much lower rate, the city would lose about $1 million per year if the amendment were to pass, city Finance Director Lori Fleming said.

“That’s a fire station and several cops,” City Manager Bill Watkins said.

Fearful that the measure could sap a significant amount of money every year from the city’s $67 million general fund — which pays for police and fire protection, among other things — officials last night adopted a resolution opposing the amendment. Copies of the city’s resolution will be sent to state legislators.

“If this passed, and if the interpretation as we’re reading it is correct, it could be a significant loss,” Assistant City Manager Paula Hertwig Hopkins said. “It wouldn’t be good legislation for us.”

Proponents of the measure argue the amendment would lower customers’ monthly bills and bring uniformity to tax rates charged by cities across the state. Rep. Shannon Cooper, R-Clinton, is sponsoring the legislation in the House. In 2005, he sponsored a similar bill that would have capped tax rates on all telephone companies at 3 percent.

That bill did not pass, but Cooper said this morning he thinks taxes on telephone companies are “unfairly high.”

Don Neely, a spokesman for CenturyTel, said his company has not taken a stance on the proposal.

Mayor Darwin Hindman, noting that council members rarely accept or act on legislation that is not directly related to city business, said cities slowly are losing their rights to tax large companies that operate within city limits.

Legislators in March passed a bill that allows the state to negotiate television franchise agreements with cable companies. Funds from those agreements also were placed in the general fund.

“We do have to maintain our streets and maintain our fire departments and police departments,” Hindman said. “We need to express ourselves on this. This directly affects us.”

The resolution was approved in February by the House Rules Committee, which Cooper chairs, but it is not yet scheduled for further action. The Senate still would have to approve the measure before it is sent to voters.

“We’re going to have to recoup this by other measures” if the amendment passes, Fifth Ward Councilwoman Laura Nauser said.

In other business yesterday, the council:

• Called for a public hearing regarding a request from Mesa Air to provide flights from Columbia Regional Airport to Kansas City. Twelve weekly flights to St. Louis would be scrapped under the plan if it is approved by federal officials.

The public hearing will be held April 16.

• Agreed with Boone County and the Daniel Boone Regional Library board of trustees on a five-year option to purchase land on the Atkins tract at the Boone County Fairgrounds for a new library branch.